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Short Sale approved - Waiting approval from 2nd Loan (HELOC)

Discussion in 'Wells Fargo Home Mortgage' started by stuckInNoVA, Jan 12, 2011.

  1. stuckInNoVA

    stuckInNoVA LoanSafe Member

    Well, I spent here over a year trying learn ways to save out house. Unfortunately, we ran out of patience and time. We were offered trail mods I think 4 -times and most of the the time the payments were more than our mortgage amount.

    Finally, we decided to go with Short sale and surprisingly it was approved very quickly even with holiday season. It was approved on Jan 7th and we got the letter yesterday. They want us to close the deal by Feb 1st or risk foreclosure they say won't get postponed as they already postponed once with my loan status as Short Sale approval pending.

    Both my loans are with Wells Fargo. The first loan sent a letter to 2nd one about the short sale approval and that they would be getting around 11K to settle off second loan (I owe 110K on my HELOC).

    I am not sure if this standard process but the second mortgage office which is also Wells Fargo want to do a BPO (some appraisal). I am worried that if they take took long we miss the Feb 1st deadline set for closing. Anyone knows how long they take and if there is anything I can do to speed it up? The settlement company is doing all the communication with them and they seem to get no clear time line when they will be done with BPO and give approval for the sale.

    I appreciate all the great advise we got from here. It atleast helped us live a year longer in the house and save some cash to recoup of the heavy loss we took on this house on which I put almost 20% down.
  2. Moe

    Moe Call 1-800-779-4547 Staff Member Loan Safe Mortgage


    This is really common for a 2nd mortgage to ask for a BPO so they know they are not getting short changed. Even though they are the same company, the loans are probably owned by different investors who own these pools. The BPO must be just part of the procedure they must follow. Unfortunately, you are the mercy of Wells here.
  3. stuckInNoVA

    stuckInNoVA LoanSafe Member

    Moe, thanks for the information. I talked with them later and that is exactly what they said. The lady said it's a process and the assigned 'negotiator' should usually look at my file within 7-days and they are used to paying attention to the last day of the short shale approval. So, i guess, I should plan for my move so I can be out of the home by 31st of this month.
  4. silverwing750

    silverwing750 LoanSafe Member

    Short Sale Process

    Well here is where I am with wells Fargo. We have a 227,000 balance on a mortgage with Wells Fargo. we have no second mortgage. Due to divorce and job loss we could no longer keep the house. We have been communicating with Wells from day 1 and asking and getting theirs and other guidance.

    We went the short sale process even after having the home for sale for 6 months before the divorce trying to not lose on the mortgage.

    So we went short sale, got approved for that process, we got lucky and found a buyer. We had an offer for 175,000 on a home we paid 244,000 for. But we also had PMI- Mortgage insurance.

    Wells turned down the first offer, we negotiated and get a deal we all approved, Wells Fargo made the last offer and the buyer agreed to it.

    The the file went to the Mortgage insurance company, they had it for 3 weeks but came back and said yes they approved.

    So you think we have a approved short sale from Wells Fargo and the Mortgage Insurance company and right behing that is a new email from the Wells Fargo Mortgage Negotiator stating that the "investor" is now requiring us to come to the closing table with another $6,000 cash or sign a promissary note for $15,000 in order to complete the deal.

    Understand our terms we owe 227,000 we have a buyer at 185,000 our mortgage insurance was for 20% of the orignal mortgage so that is worth about 48,000 k

    So between the buyer and the mortgage insurance Wells fargo is out maybe $ 2,500 in closing costs

    And now after 3 months of playing the process game and thinking we are approved they throw this curve ball at us.

    So be aware there are other surprises they just keep throwing at you I believe in an attempt to get as much cash out of us as they can possibly get

    Hold on I hope that gives you some further insight and things to watch for
  5. stuckInNoVA

    stuckInNoVA LoanSafe Member

    Finally got a call from Wells Fargo 2nd Lien. The negotiator basically talked about how in state of VA they can approve the short sale and come after us for the balance of loan amount or they can clear me of debt if I agree to pay some of the balance. I explained my situation and the hardship we are in financially to even bring any more money as it's hard for us to rent with 3-4 months advance payments as well as payments on our other loans that we got to support ourselves during the time of hardship.

    Negotiator said she will let their legal department know about our situation and that we can't bring any more payment nor would i go with short sale if we are not cleared with debt. I said I basically want 1099c be be cleared of all debt or else, I will probably have to go with foreclosure/bankruptcy.

    Please let me know if what I did is the best for us. Or is there something I should know to protect ourselves from having to deal with surprise payments on the house after we sell?

  6. stuckInNoVA

    stuckInNoVA LoanSafe Member

    I hope I get an answer to this question. I am really confused at this point. The second which is a HELOC taken at purchase time approved the short sale but decided not to forgive me for the balance. I need to work with them on payment plan and they are expecting to get at least half of my loan amount or even more. I am waiting to get clear number from them. I owe 110K on second loan and I just don't want to pay more than maybe 5k at the most. First is already paying them around 11k.

    Short sale has to be done by Feb 1st or the house is set for foreclosure on 7th. What is the best option for me to get out of the house with as little payment as possible? I don't want to declare bankruptcy. If we do foreclosure can the second loan or the first one still come after us for their loss?

  7. Moe

    Moe Call 1-800-779-4547 Staff Member Loan Safe Mortgage


    Personally, I am not sure I would agree to that. Especially if you cannot afford the plan. The HELOC may not have much of a have a leg to stand on. Unless you have assets and they know that can go after you. But in any event, you should look into bankruptcy if you have this HELOC issues and other debts.

    There are members who have negotiated payoffs of 10-40%, but they had some cash. $110k is a lot.

    If you were just to say the heck with it, at least you have a long time before they actually go after you as opposed to agreeing with something right now. Hence, sticking your head in the sand may buy you time to decide BK because this short sale does not seem to be helping you at all.

    You should really talk with some good lawyers in your area. Good luck!
  8. TomEason

    TomEason LoanSafe Guide Staff Member

    I'll tell you what I would do were I in your shoes. I'd blow up the deal with the buyer, and let the 1st foreclose. The 2nd will be wiped out in foreclosure, which in VA is always a trustee sale for small residential loans. Since it's a trustee sale, there can be no deficiency judgment. Your 2nd will be wiped out at the trustee sale, and will become a "sold out junior." I have seen no evidence of any "sold out junior" lender in any state suing the borrower for money due, even though, in a recourse loan, they are not legally barred from so doing. In the mean time, continue living there mortgage payment free, all the while saving $$. As is typically the case, and which you have unfortunately experienced, a SS is usually way more trouble than it's worth, and often unsuccessful no matter how hard you've tried.
  9. stuckInNoVA

    stuckInNoVA LoanSafe Member

    Thanks for the information. After reading both the replies, I called my negotiator and she told me they are looking for significant amount since they see my income to debt ratio is good if my first mortgage is cleared about short sale. She suggested I start with 5K offer to debt forgiveness and see what the approver (investor?) will come back with.

    I assumed all this process will go smoothly as I've seen couple of my friends who went through similar process without issues with Bank of America once the first loan approved the short sale. We even rented a place to move from Feb 1st and had to pay 3 months payments due to our bad credit. So, at this point I am toast on the idea of saving any more living for free.

    We are too nervous about the idea of Bankruptcy due to the effect we might have on getting a security clearance jobs in DC metro area. Is it legal to use Realtor help for making some of the payment to 2nd lien for forgiveness? Looks like they are willing to do take some cut on their commission than losing the sale. Instead of a deal on this sale, they sound like they will help me with my rent payment for couple of months as I used the same one for renting a place. Will keep you updated about my outcome.

    We are all packed and little excited about starting a new life and we are hit by this curve ball shattering our plans :-(
  10. TomEason

    TomEason LoanSafe Guide Staff Member

    Thanks for your update. Yes, I think you should take your real estate agent's offer of a contribution. You do not need to worry about the legality as much as the real estate broker does, because they may put their license in jeopardy if a blatant non-disclosure is discovered. Good luck!
  11. stuckInNoVA

    stuckInNoVA LoanSafe Member

    WF HELOC approved the short sale after I agreed to bring 5K. The negotiator confirmed I will see "Forgiveness of Debt" and they won't come after me later or sell to some collection agency. So, we are all set to close before 1st unless the buyer causes problems. We also have four backup buyers who are hoping the main one backs off as they all see 750K as a bargain price for our house. So, we should be able to complete the sale (touch wood). Will keep you posted when it's all done. I am not sure how good it is but we feel lot of relief thinking about not carrying a mortgage on a house that lost almost 50% of the value with the approved short sale offer.
  12. TomEason

    TomEason LoanSafe Guide Staff Member

    Congratulations on the WF settlement. Here's hoping the sale closes on time and without more obstacles. Hopefully some, if not all, of that $5k is coming from your real estate agent, especially if getting both "sides" of the deal, which is usually 5% of the selling price. Good luck!
  13. GoGators

    GoGators LoanSafe Member

    I delayed my foreclosure date

    I am in almost the same position as you are. WF said they would not delay foreclosure.
    because it was too late to hear back from the first mortgage.

    I looked at Moe's contacts, and emailed about 5 executives. One of them bit,
    and to make a long story short, I am almost done with the short sale, but we are waiting for the 2nd to approve of the payoff from the first.

    The person I emailed that pushed this through was

    Cara Heiden


    Look it up on here somewhere. So it never hurts to escalate. What have you got to lose.
    They contacted the short sale department, which contacted the lender, and got it delayed, even though the short sale negotiator we had before at WF said it would never happen.

    Start at the top and go down, not the other way around.

    Good Luck
  14. stuckInNoVA

    stuckInNoVA LoanSafe Member

    @GoGators: Thanks for the Cara information. We are planning to contact her to see if she can help us get a day or two extension on the final closing day which was yesterday. Our 2nd lien approved short sale 26th evening with some contingent request to 1st about releasing some documents on our property. So, only on 27th morning we got confirmation about all approvals. Then buyer had a little shake about buying the house but they recouped and started to work on closing but title insurance, appraisals, inspections all just got delayed a day or two due people not being efficient enough as they seem to blame on mother nature or some people assuming they can get an extension.

    Anyway, the investor didn't agree to extend the closing date to 4th and wants to foreclose the house on 7th. Settlement company wants to still go ahead with closing with the hope that if we all sit together with funds ready to be wired by later today we might be able to pull it off. Buyer Realtor thinks it's hard to close today but for sure they can do by tomorrow. It's freak'n crazy after coming this close to selling the house. We even gave in to buyers demand to leave several things in the house just because my wife thinks Short Sale is more graceful for her pride :) compared to foreclosure. I really don't care at this point but with foreclosure, i can sell of the things we offered to the buyer from our media room, washer/dryer, ceiling fans, wine coolers, chandeliers, window treatments and easily make over $5K. And also, I have hope WF will have some cash for keys offer for us :).

    At this point my advise for anyone thinking about short-sale. It's not worth it. Too much pressure and if you get a lousy buyer, you are in for lot of sleepless nights.
  15. TomEason

    TomEason LoanSafe Guide Staff Member

    Sorry you're going through this last second fiasco! While typical of most real estate closings, this one has the consequence of foreclosure if delayed, unless WF wakes up fast. Anyway, thanks for sharing your experience - it's invaluable info to members who are considering a SS. I have frequently emphasized the enormous stress and hassle involved for the homeowner. And for this, the homeowner not only loses the house, but gets no $$ for all the hassle! I hope you get through this OK.
  16. stuckInNoVA

    stuckInNoVA LoanSafe Member

    If all the stress is not enough we have another one. The buyers mortage is also with Wells Fargo and that is helping us a bit as my negotiator confirmed that investor will accept the sale if it' closed by tomorrow. Just when we thought we will be able to pull it off, the buyers loan documents (Loan is with Wells Fargo for them) are mailed from Ohio to PA for underwriter review and approval (I have no idea what role underwrites have) and it was supposed to be back to Ohio by tomorrow. But to due to severe weather conditions in Memphis, the Fedex overnight package is delayed by a day :-(. Hopefully, we can pull it off on Friday before the Foreclosure date on Monday. At this point I am just laughing at all this happening as if to test our fate. My wife couldn't handle this any more and she finally picked up the phone and talked with few folks at WF and sent an email to the one mentioned above. Hoping it will help us. She was told they are all working on our file and she was told a request to stop foreclosure on 7th is sitting in their president's office (Really???). Looks like WF is very strict about not extending Foreclosure more than once for SS.

    It's strange that even mother nature is supporting Foreclosure on our house (pun intended).
  17. TomEason

    TomEason LoanSafe Guide Staff Member

    Your last remark made me chuckle. This would be a pretty funny story were it not so incredibly stressful for you guys. I'll have my fingers and toes crossed for you.
  18. stuckInNoVA

    stuckInNoVA LoanSafe Member

    Thanks you so much. Another funny incident for you. Our Negotiator's last name has DeJesus******. The buyers loan officer who is in touch with him to give updates was told by negotiator, "Only God can save this house from foreclosure". The buyer's loan officers says back to him, "This is your chance to be Jesus" :).
  19. stuckInNoVA

    stuckInNoVA LoanSafe Member

    Finally my sale went through after lot of drama and tensions from both Wells Fargo and buyers. Wells Fargo fortunately extended the sale date by 10-days as it took too long for 2nd Lien to approve the sale and there was not enough time for backup buyers to come to closing. Just when we thought of going with backup buyers, the first buyers want to get into the act and we decided to go with them as second didn't look good either as they started to take advantage of our situation by asking us to leave media room, etc with the house.

    In the end it all went well and we are at a rental place already. Life has never been so peaceful since 2006 when we were forced into buying this house even though we couldn't sell our old house. If not for all those stupid loans like no-docs loan we would have been living happily in our previous home without much mortgage.

    Our plans for now are to stay away from home ownership until our credit improves and have enough savings to put down 30-50% down on a much smaller home.
  20. TomEason

    TomEason LoanSafe Guide Staff Member

    Thanks for letting us know. I'm so glad your deal finally closed. And, although you had a ton of challenges, you were able to display your sense of humor to the end. Hurrah!

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